When Clarke Stephan, a vice-president at Systems Marketing Inc. (SMI), in Phoenix, bought an IBM Personal Computer 18 months ago, he thought it would suit the company's needs perfectly. The PC came with 128K of internal, or random access, memory (RAM), and two floppy disk drives, which stored 160K bytes, or characters of information, each. This capacity, Stephan figured, would be ample for creating electronic spreadsheets for his $29 million-a-year equipment leasing company But, he says, "when we found out how convenient it was and got more than one person interested in using it, we ended up overloading the thing." To handle other jobs, such as accounting and inventory management, Stephan bought another PC. Then, for $2,695, he vastly increased the capabilities of his first machine.

For that sum, he acquired a hard disk (also known as a Winchester disk), which holds 10 megabytes (10 million characters). The second computer also has a 10-megabyte (MB) disk -- and both machines have a 320K floppy drive for transferring programs to the hard disk. Now, when he tracks the items his company leases, all the information fits on one device. "The kind of database we wanted to maintain would have required 25 or 30 floppies," he says. One file, for example, containing details on every piece of equipment SMI has out on lease, takes up nearly 2 million bytes. "That would be impossible to manage on a floppy-disk system," he adds.

Stephan's dilemma -- and its solution -- are far from unique. Some 95% of the problems businesspeople encounter with their personal computers involve storage limitations, points out Dom Camardella, a Santa Barbara, Calif., microcomputer consultant with Data Bank. This is particularly true if your business is growing, adds Jay Honeycutt, president of Computer Group Inc., a consulting and education firm in Boston. "The numbers and warm bodies you're keeping track of are going to expand," he adds. "So you have to have enough disk capacity to grow as your requirements grow."

Until recently, micro owners generally would replace 5 1/4-inch floppy disks with 8-inch floppies before buying a Winchester. But with prices falling for hard disk drives, this intermediate step is becoming less common. And hard-disk devices, which consist of a number of platters -- much like phonograph records -- are much more reliable than floppies, since the disks are sealed in a box to prevent impurities. The individual platters measure either 5 1/4 inches or 8 inches, and the drives will store from 5 to 40 MB or more. With some brands, you can "daisychain," or link together, several such devices for even greater capacity.

Dozens of manufacturers are currently selling the drives, which cost roughly $1,500 to $8,000. (As a portent of lower prices, Non-Linear Systems Inc. in Solana Beach, Calif., is offering its portable Kaypro 10 computer, which comes with a 10-MB hard disk, for $2,795.) Some brands will work with many kinds of micros; others are designed for a specific machine. Usually included in the price are a disk-controller card that links the computer to the disk and software modification for the micro's operating system, so it will "recognize" the different drive.

If you are shopping for disk drives, you should look for an entire package and see it operating with your machine before buying. Purchasing a hard disk from the same company that made your micro is also a good idea. It may be more expensive, says Computer Group's Honeycutt, but you get guaranteed compatibility and support. "They can't very well say it won't work, when they're selling both ends of the system," he says.

Besides greater capacity, the hard disk has other advantages. It allows users to sort through data much faster. At home, Stephan works on another PC equipped with two floppy drives. "It appears to take three times as long to do anything," he says. And, he points out, the Winchester is more convenient. "People have a hard time juggling floppy disks around," he says, "They tend to get the wrong one, in the wrong place, at the wrong time."

While solving some problems, though, upgrading a micro with a hard disk creates another -- backing up large files. For instance, it would take Stephan two hours and 30 floppies to duplicate the data on an entire 10-MB disk. To counter this difficulty, some users buy either another hard disk or cartridge tape streamers. These cartridges are like large audio cassettes, and the entire assembly costs about the same as a Winchester. With most streamers, says Alan Groh, director of operations at Sauer Computer Systems Inc., a St. Louis -- based consulting firm, you can copy 16 MB in three to five minutes. (Recently, removable cartridge hard disks, which cost from around $1,800 to as much as $6,000 and hold from 5 to 25 MB, have come on the market. The cartridges can be inserted into drives, just like floppies, and make convenient backup devices for traditional Winchesters. And, says Honeycutt, "the price is going to drop like a stone.")

Six months after he bought his second hard disk, Stephan ordered a $1,795 Davong tape back-up; it proved its worth even before it arrived. While it was on order, an employee accidentally hit a wrong key and wiped out four weeks' worth of nonduplicated data. Preparing for disaster, yet having it happen anyway, "rubbed salt in the wound," says Stephan.

Finding that the software you are using on floppies won't work with a hard disk is another possible hassle when changing from one kind of disk drive to another. You should check out software compatibility at the outset, suggests Honeycutt.

Adding options, such as a hard disk, to accommodate growth is one way of upgrading a micro. Other devices are nonessential but will make life easier. Dom Carmadello usually recommends a printer buffer. The buffer, which costs $200 to $500, is a black box that connects to both the computer and the printer. When you punch the "print" button, the buffer's memory stores the material you want printed, then sends it to the printer at a speed the device can handle. The micro itself is then free for more work. A buffer, says Carmadello, is "a first-step solution to improving the amount of processing you can get off your personal computer without buying another machine." (You can also buy print-buffering software for 16-bit machines for $50 or less.)

Then there are some options you must have if you plan to do a certain task. "You go to any computer store," says Honeycutt, "and there will be someone sheepishly shelling out two or three hundred dollars for something they didn't realize they needed or thought they were originally getting." The add-on you might need depends on your system. To do color graphics with an IBM PC, for instance, you need a color monitor -- a high-resolution one costs around $700 to $900 -- and a $250 card to drive the monitor.

To run some newer software packages, you might need more RAM. Lotus 1-2-3, for example, which runs on the 16-bit IBM PC, won't work without at least 128K RAM. (A newer version of 1-2-3, designed to run on IBM's new XT machine, needs 192K.) If you bought the plain vanilla version of the PC, which comes with 64K you would have to purchase an expansion card, with another 64K, for $350. (Cards, or boards, slip into special slots in a computer's chassis. They can be either expansion cards or interface cards, which allow one device to work with another.)

Or, your work might require extra memory. Stephan's computers each have 256K. But until he increases the RAM of at least one micro to 512K, he won't be able to run the giant 1-2-3 spreadsheet he has created. That model, which helps him calculate the loans on any piece of equipment SMI owns, measures 30 columns by 250 rows and uses 300K. "We can't even get it on the machine until we upgrade the memory," he says.

Mark Nigberg, the computer-savvy president of Nigberg Corp., a $6 million -- a-year advertising and public relations firm in Framingham, Mass., found adding more memory the least of his worries when he bought an Apple II four years ago. (That model has recently been replaced by the improved Apple IIe.) At the time, about the only software available for the micro, which uses the Apple's own operating system, Apple DOS, were game programs and a handful of business programs. So Nigberg first spent about $200 for a so-called integer card, which added 16K to the computer's 48K RAM and allowed him to program in Basic. Then he noticed that the business software he was trying to create already existed on the shelves. But to use it, he needed Digital Research Inc.'s CP/M operating system. For about $200, he bought a card that allows the Apple to run CP/M.

He then bought word processing and spreadsheet programs. But when he looked on the screen, he says, "every letter was capitalized and when I was in VisiCalc I couldn't get 80 columns." So for a few hundred dollars more he bought an "enhancer" card that provided upperand lower-case characters and a "video-term card" that let him see 80 columns at once. His next purchase was a $300 modem and a communications board that allows him to swap data electronically with his clients.

Along the way, he bought a couple of printers -- and two more boards for serial and parallel interfaces, so he could hook up the printers with the computer. Then, last year, he bought another Apple -- along with all the accessories he had for his first machine -- to accommodate employees who wanted to use the computer.

The two machines, he explains, "were generating lots of diskettes. Everything was mixed and matched." The next step was to buy two 10-MB Corona hard disks for $2,500 each. But, he says, "I'm filling up this box with cards and peripherals, and I'm creating too much heat, so I got a system saver." That device, which costs $75, in addition to allowing the user to turn everything on with one switch, provides a fan and a power-line-surge suppressor. Now, says Nigberg, "if I get a line surge, the whole thing won't blow up."

Nigberg figures he has gone to the wall in adding capacity to his Apples. "You can stuff only so much into the box," he says. Eventually, "you run out of power, you run out of steam, and you run out of space." Consultant Jay Honeycutt would agree. Running your business on an Apple, he says, "is like hauling timber in a Volkswagen. You can do it, but it's not the most logical way of doing things."

Nigberg is now looking into a departmental computer that will provide multiple terminals, let employees share data, and allow him to take advantage of advances in technology. After all, he says, even if he got more Apples and linked them with a network (see INC., November 1982, page 49), he would just have "five or six little boxes using little box software." The system he chooses will also let him use his Apples as terminals.

Stephan, though, plans to add another IBM PC and network the three machines. And even though he doesn't intend to use the third PC in jobs that require much storage, he will buy it with another hard disk, "because we've learned how easy it is to eat up file space." One week, for example, he had to erase files off one hard disk every day just to give him room to operate. "I was bumping my head on the 10 megs," he says. "We're so optimistic about the time savings and the convenience of the hard disk," he adds, "that it's worth the extra money to do it up front as opposed to later."